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How do Young People Choose College Majors?

  • MONTMARQUETTE, Claude
  • CANNINGS, Kathy
  • MAHSEREDJIAN, Sophie

Previous studies on the determinants of the choice of college major have assumed a constant probability of success across majors or a constant earnings stream across majors. Our model disregards these two restrictive assumptions in computing an expected earnings variable to explain the probability that a student will choose a specific major among four choices of concentrations. The construction of an expected earnings variable requires information on the student s perceived probability of success, the predicted earnings of graduates in all majors and the student s expected earnings if he (she) fails to complete a college program. Using data from the National Longitudinal Survey of Youth, we evaluate the chances of success in all majors for all the individuals in the sample. Second, the individuals' predicted earnings of graduates in all majors are obtained using Rumberger and Thomas's (1993) regression estimates from a 1987 Survey of Recent College Graduates. Third, we obtain idiosyncratic estimates of earnings alternative of not attending college or by dropping out with a condition derived from our college major decision-making model applied to our sample of college students. Finally, with a mixed multinominal logit model, we explain the individuals' choice of a major. The results of the paper show that the expected earnings variable is essential in the choice of a college major. There are, however, significant differences in the impact of expected earnings by gender and race.

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File URL: http://hdl.handle.net/1866/451
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Paper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 9719.

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Length: 29 pages
Date of creation: 1997
Date of revision:
Handle: RePEc:mtl:montde:9719
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  1. Engle, Robert F & Hendry, David F & Richard, Jean-Francois, 1983. "Exogeneity," Econometrica, Econometric Society, vol. 51(2), pages 277-304, March.
  2. Mark C. Berger, 1988. "Predicted future earnings and choice of college major," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(3), pages 418-429, April.
  3. Joseph G. Altonji, 1991. "The Demand for and Return to Education When Education Outcomes are Uncertain," NBER Working Papers 3714, National Bureau of Economic Research, Inc.
  4. Hartog, Joop & Pfann, Gerard & Ridder, Geert, 1989. "(Non-)graduation and the earnings function : An inquiry on self-selection," European Economic Review, Elsevier, vol. 33(7), pages 1373-1395, September.
  5. Berger, Mark C., 1988. "Cohort size effects on earnings: Differences by college major," Economics of Education Review, Elsevier, vol. 7(4), pages 375-383, August.
  6. Julian R. Betts, 1996. "What Do Students Know about Wages? Evidence from a Survey of Undergraduates," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 27-56.
  7. Kathy Cannings & Sophie Mahseredjian & Claude Montmarquette, 1994. "Major Choices : Undergraduate Concentrations and the Probability of Graduation," CIRANO Working Papers 94s-09, CIRANO.
  8. Francine D. Blau & Marianne A. Ferber, 1991. "Career Plans and Expectations of Young Women and Men: The Earnings Gap and Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 26(4), pages 581-607.
  9. Stern, David & Paik, IL-Woo & Catterali, James S. & Nakata, Yoshi-Fumi, 1989. "Labor market experience of teenagers with and without high school diplomas," Economics of Education Review, Elsevier, vol. 8(3), pages 233-246, June.
  10. Saul Hoffman & Greg Duncan, 1988. "Multinomial and conditional logit discrete-choice models in demography," Demography, Springer, vol. 25(3), pages 415-427, August.
  11. Rumberger, Russell W., 1984. "The changing economic benefits of college graduates," Economics of Education Review, Elsevier, vol. 3(1), pages 3-11, February.
  12. Paglin, Morton & Rufolo, Anthony M, 1990. "Heterogeneous Human Capital, Occupational Choice, and Male-Female Earnings Differences," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 123-44, January.
  13. Bhat, Chandra R., 1995. "A heteroscedastic extreme value model of intercity travel mode choice," Transportation Research Part B: Methodological, Elsevier, vol. 29(6), pages 471-483, December.
  14. Polachek, Solomon William, 1981. "Occupational Self-Selection: A Human Capital Approach to Sex Differences in Occupational Structure," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 60-69, February.
  15. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60 National Bureau of Economic Research, Inc.
  16. Zalokar, Nadja, 1988. "Male-Female Differences in Occupational Choice and the Demand for General and Occupation-Specific Human Capital," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 59-74, January.
  17. Flyer, Fredrick A, 1997. "The Influence of Higher Moments of Earnings Distributions on Career Decisions," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 689-713, October.
  18. Blakemore, Arthur E & Low, Stuart A, 1984. "Sex Differences in Occupational Selection: The Case of College Majors," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 157-63, February.
  19. Peter Rupert & Mark E. Schweitzer & Eric Severance-Lossin & Erin Turner, 1996. "Earnings, education and experience," Economic Review, Federal Reserve Bank of Cleveland, issue Q IV, pages 2-12.
  20. Mattila, J. Peter & Orazem, Peter, 1986. "Occupational Entry and Uncertainty: Males Leaving High School," Staff General Research Papers 10847, Iowa State University, Department of Economics.
  21. Rogers, Alan R, 1994. "Evolution of Time Preference by Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 460-81, June.
  22. Sarah E. Turner & William G. Bowen, 1999. "Choice of major: The changing (unchanging) gender gap," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 289-313, January.
  23. Kodde, David A, 1986. "Uncertainty and the Demand for Education," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 460-67, August.
  24. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  25. Rumberger, Russell W. & Thomas, Scott L., 1993. "The economic returns to college major, quality and performance: A multilevel analysis of recent graduates," Economics of Education Review, Elsevier, vol. 12(1), pages 1-19, March.
  26. Jack Fiorito & Robert C. Duffenbach, 1982. "Market and nonmarket influences on curriculum choice by college students," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 88-101, October.
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